Shareholders of Lloyds are going to take legal action against the Treasury and the Directors of Lloyds TSB over claims that important information related to HBOS's finances was concealed from them.

These share holders claim that they were not told anything about the loan the Government gave to HBOS in October 2008. They also point that they were not provided information and misled into voting for the HBOS takeover. The loan was worth around £25.4bn and it was not revealed to the shareholders till November 2009.

Now almost 500 shareholders have formed a group called Lloyds Action Now and planning to recover some of the £14bn which was lost by them as a result of the merger.

These shareholders have sent their demands to the Treasury and Lloyds Directors for providing them with compensation. It has given them 90 days time after which the group will take the necessary legal action.  

Lloyds had announced in April that it has started to generate profit in the first quarter of 2010 even though it failed to provide any figures.

However, Lloyds is defending its actions and maintains that it wanted to help shareholders with the same. It stressed that it thought that the actions will lead to long term benefits for its share holders.